TOKYO - JAPANESE exports plunged almost 10 per cent in the first 20 days of October as bankruptcies soared, pushing Asia's largest economy deeper into a slump, a slew of gloomy data showed on Tuesday.

The sharp drop in exports reflected a rapid deterioration in the global economy that has hammered Japanese corporate giants such as Toyota Motor and Sony, and caused more than 1,400 firms to go bust last month alone.

'The economy is getting more sluggish,' Bank of Japan deputy governor Hirohide Yamaguchi said in parliament. 'Since around the end of last year the economy has suffered various negative shocks from overseas.'

The slump in exports contrasted with a small rise in September, when brisk shipments to the rest of Asia had offset a decline in demand in the United States and western Europe.

Exports fell 9.9 per cent in the first 20 days of October while imports rose 3.8 per cent, leaving a trade deficit of 171.82 billion yen (S$2.64 billion), the finance ministry said based on provisional figures.

Japan has enjoyed brisk exports in recent years, helping Asia's largest economy to recover from recession in the 1990s.

But the economy shrank in the second quarter of this year and there are increasing fears that it is once again in recession, which is usually defined as two straight quarters of economic contraction.

A separate report showed Japan's current account surplus nearly halved in September from a year earlier amid sluggish exports.

Since then the economic climate only appears to have grown even more chilly.

The economic crisis pushed 1,429 companies into bankruptcy in Japan in October, the most so far this year, a survey showed.

Corporate bankruptcies soared 13.4 per cent from a year earlier as companies struggled to raise funds amid the global credit crunch, according to Tokyo Shoko Research which conducted the survey.

'One factor behind the rising number of bankruptcy is that banks are reducing loans to companies,' said Mr Masashi Seki, an official at the research firm.

Corporate Japan has been a key driver of a recovery in Asia's biggest economy after the recessions of the 1990s.

Profits, however, are now sliding as the country teeters on the verge of recession and exports suffer from the global economic slowdown.

'The factors behind the deterioration in the domestic economy have extended from sluggish exports to slowing domestic demand,' said Kyohei Morita, chief Japan economist at Barclays Capital.

Real estate firms and small companies in particular are feeling the strain but retailers and transport firms are also going bust.

Ordinary Japanese are also growing gloomy. The government's Economy Watchers Survey, which gauges the mood among workers in Japan, slid to 22.6 in October from 28.0 in September.

The survey's outlook index, which gauges expectations for the next two to three months, sank to the lowest level in more than seven years. -- AFP